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IMF Standing Borrowing Arrangements

October 13, 2017

Through the New Arrangements to Borrow (NAB), the IMF’s main backstop for quota resources, a number of member countries and institutions stand ready to lend additional resources to the IMF. The General Agreements to Borrow (GAB) allows IMF borrowing from a more limited number of countries and institutions in circumstances where the NAB cannot be activated.

New Arrangements to Borrow (NAB)

The NAB is a set of credit arrangements between the IMF and 38 member countries and Institutions, including several emerging market countries. The NAB
is used in circumstances in which the IMF needs to supplement its quota resources for lending purposes. The NAB is subject to
periodic renewal. In November 2016, the IMF’s Executive Board approved its renewal for another five years starting in November 2017.

Decision to triple the IMF’s lending resources

As part of efforts to overcome the global financial crisis, in April 2009, the Group of Twenty industrialized and emerging market economies (G20) agreed to
increase the resources available to the IMF by up to $500 billion, thus tripling total pre-crisis lending resources of about $250 billion.

This broad goal was endorsed by the International Monetary and Financial Committee
(IMFC). The increase was made in two steps: first, through bilateral financing from IMF member countries; second, by incorporating this financing into an
expanded and more flexible NAB.

Origins of the NAB

The original NAB was proposed at the 1995 G7 Halifax Summit following the Mexican financial crisis. Growing concern that substantially more resources might
be needed to respond to future financial crises prompted participants in the Summit to call on the G10 and other financially strong countries to develop
financing arrangements that would double the amount available under the GAB. In January 1997, the IMF’s Executive Board adopted a decision establishing the
NAB, which became effective in November 1998.

Expanded NAB

The amended NAB, which became effective on March 11, 2011, increased the maximum amount of resources available to the IMF under the NAB to SDR 370 billion
(about $580 billion at the time), from SDR 34 billion. To make the expanded NAB a more effective tool of crisis prevention and management, the loan-by-loan
activation under the original NAB was replaced by the establishment of general activation periods of up to six months. The activation periods are subject
to a specified maximum level of commitments.

NAB rollback

In the context of the agreement in December 2010 to double the IMF’s quota resources under the 14th General Review of Quotas, members agreed on a corresponding rollback of the NAB, resulting in a shift in the composition of the IMF’s resources from NAB to quotas. Following the payments for quota increases under the 14th Review in February 2016, the NAB has been rolled back from SDR 370 billion to SDR 182 billion.

How the NAB is used

The IMF’s Managing Director must make a proposal to activate the NAB. The proposal becomes effective when accepted by participants representing 85 percent
of total credit arrangements and eligible to vote. Approval by the IMF’s Executive Board is also required. The NAB was activated for the first time in
December 1998. Since its enlargement in March 2011, the NAB has been activated ten times. The last activation was terminated at the end of the quota
payment period for the quota increases under the 14th Review (February 25, 2016).

General Agreements to Borrow (GAB)

The GAB enables the IMF to borrow specified amounts of currencies from 11 advanced countries (or their central banks), under certain circumstances. The GAB may only be activated when a proposal to activate NAB is rejected by NAB participants.

The potential amount of credit available to the IMF under the GAB totals SDR 17 billion, with an additional SDR 1.5 billion available under an associated borrowing arrangement with Saudi Arabia. The GAB was established in 1962 and expanded to its current size in 1983, from about SDR 6 billion. It has been activated ten times, the last time in 1998. The GAB and the associated credit arrangement with Saudi Arabia was renewed, without modifications, for a period of five years from December 26, 2013

GAB Participants and Credit Amounts

Original GAB
(1962–1983)

Enlarged GAB (1983–2018)

Participant

Amount

(SDR million1)

Amount

(SDR million)

Belgium

143

595

Canada

165

893

Deutsche Bundesbank

1,476

2,380

France

395

1,700

Italy

235

1,105

Japan2

1,161

2,125

Netherlands

244

850

Sveriges Riksbank

79

383

Swiss National Bank

1,020

United Kingdom

565

1,700

United States

1,883

4,250

Total

6,344

17,000

Saudi Arabia (associated credit arrangement)

1,500

1
SDR equivalent as at October 30, 1982.

2
250,000 million yen entered into effect on November 23, 1976.

Note: Total may not equal sum of components due to rounding.

Participants
have agreed unanimously
that the GAB should be allowed to lapse when its current term ends on
December 25, 2018. GAB participants noted that, while the GAB has served a
useful role in the past, its importance as a backstop against potential
systemic shocks has declined substantially over the years. The associated
agreement with Saudi Arabia will also not be renewed and its term will also
end on December 25, 2018.